Rocking leisurely on the porch of Sunset Village, rehashing last month’s nail-biter of a bingo night, restaurant-industry graybeards could be excused if they suddenly spat out their chamomile in disbelief. Were the hallowed principles and outposts of the business being packed off this week to a Florida retirement home?
Were they actually seeing true touchstones of the trade, some still of a tender vintage, being presented a gold watch and sent off to play golf?
Here are some of the retirements that had silverbacks spitting their tea.
1. Breakneck tech decisions
According to the prevailing wisdom, restaurateurs should approach tech decisions in the same way they’d take a ride in an F-16 fighter jet: Strap in, pray fervently, and try to stay conscious as you move faster than you ever have before. It’s all about speed and risky maneuvering.
Not so fast, literally, countered speakers at this week’s TechTable Summit, a tech immersion that seems to draw more from the independent and small operator community than it does from the big-chain world. The one-day event touched on such topics as who will be running the kitchens of tomorrow, an executive chef or a chief technology officer?
As the presentations demonstrated, food-related technology is galloping ahead. A representative of the design firm Ideo previewed a table that has a cooking element incorporated into it—along with a tablet and cellphone charger.
But speakers were quick to caution restaurant attendees about the dangers of vertigo. Instead of stressing quick action, they encouraged operators to slow down the decision-making process.
“You can go down the rabbit hole of technology, make a big investment, and see it be obsolete in six months,” warned Brett Schulman, CEO of the Cava fast-casual Mediterranean chain.
“A lot of people in this business are pushing speed,” added Josh Patchus, the chain’s chief data scientist.
2. Wall Street sales pressure
Conference calls this week between public restaurant companies and the analysts who rate their stocks signaled an unexpected side effect from hurricanes Harvey and Irma: some breathing room for chain executives.
The storms in effect provided cover to concepts that have struggled under bright, sunny skies to maintain traffic and sales. Sure, same-store sales were down significantly, they told analysts, but haven’t you heard about the hurricanes? And don’t you know we have a bunch of units in Texas and Florida, the Ground Zeros for those catastrophes?
Take those wallops out of the picture, and we probably didn’t have a bad third quarter, the executives suggested.
The assertions went unchallenged to a surprising degree.
3. Old soldiers do die
The week brought the business equivalent of a broken hip to two of the industry’s balding concepts, 45-year-old Ruby Tuesday, which was sold at a head-turning bargain rate to a specialized private-equity firm, and Romano’s Macaroni Grill, which filed for bankruptcy protection.
But they weren’t the only old-guard concepts to suffer unpleasant reminders of their age. Among the others that indicated they have their wills in shape: Le Cirque, the swank New York City playground for what was once called the jet set, and Bouchon, Thomas Keller’s fixture in the Los Angeles fine-dining scene.
Le Cirque’s proprietor, the Maccioni family, says it’s searching for alternative locations, but the odds don’t look good.
Most of the ICU residents share one thing in common: landlord problems. Mac Grill said it sought Chapter 11 protection primarily because it’s still liable for the leases under 37 closed restaurants. Keller said in a note to customers that he couldn’t convince Bouchon’s landlord, the City of Beverly Hills, to be reasonable in resetting the rent.
4. Too big to buy
After news broke of Ruby Tuesday’s sale to NRD Capital for $335 million, or less than $620,000 per company-run restaurant (only 58 of Ruby’s 599 stores are franchised), speculation raged about what acquisition would be next. Among the names cited were companies once deemed too big and highly valued to merit consideration: Brinker International, Denny’s, Cracker Barrel and The Cheesecake Factory.
Applebee’s, a chain whose plight parallels Ruby Tuesday’s to some degree, wasn’t cited. But its parent company, DineEquity, which also owns IHOP, was mentioned.
The too-big-to-buy theory was also undercut by a report from Credit Suisse that investors in Restaurant Brands International are baying for another acquisition. RBI is the parent of Burger King and Tim Hortons, and recently added Popeyes to its fold.
5. A Starbucks cup means controversy
Now on to the big news: The design of Starbucks’ 2017 holiday cup was leaked this week by a careless store, and controversy didn’t ensue.
In case you’ve forgotten the hottest industry stories of 2015 and ’16, the coffee chain ignited a firestorm with the limited-time cups it rolled out for the year-end holidays. First, it removed all suggestions of Christmas or Hanukkah from the cup’s design. That even-handedness was assailed by religious groups for taking the holiday out of the holidays for the sake of political correctness.
Last year, Starbucks tried to foster peace on earth by featuring sketches of humans in all their diversity, set against a Christmas-green background. And, again, controversy erupted. The designs were still seen as being unsufficiently Christmas-y.
Now, the chain is betting on cups that combine Christmas-y and generic symbols alike. A store mistakenly provided the containers to customers, one of whom snapped a picture and posted it on social media.
The image was pulled down and the cup was pulled out of circulation. But a picture is readily available through a Google search.